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Circuit of the Americas in Austin, Texas, is gearing up for a Formula One race in November. Photo by Circuit of the Americas

Circuit of the Americas may not receive expected $30 million in state funding for F1 event

August 19, 2012

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Though the under-construction Circuit of the Americas road course near Austin, Texas, is scheduled to host its first Formula One race in less than 90 days, the effort faces still another speed bump--and this one could cost the track's promoters as much as $30 million.

Here's the issue: The track is hoping that the state will pay a percentage of the tax revenue the race will supposedly generate. The money would come from the Major Events Trust Fund, which is used to attract major annual events to Texas. The $30 million is an estimate of what that payment to the promoters would total.

While the state comptroller, Susan Combs, has said that she believes the application for the money--which her office administers--is in order, Jerry Patterson, Texas land commissioner, was not so sure. He asked the state attorney general for an opinion, and he issued one on Friday--and his opinion was, he didn't know.

There are apparently two issues involved: One is that the application for funds must come from an appropriate local entity, and that application has not been produced, Patterson said. The other potential issue is that Patterson and Combs both plan to run for lieutenant governor, and pundits suspect there may be politics at play.

The dispute is likely to end up in court, if not over this issue, then possibly as a result of a civil suit filed by critics who insist that any such private event should not be financed with public funds. The money is not scheduled to be paid until after the race, though the original promoter, Tavo Hellmund, struck a deal with the state to have the money disbursed in advance. But when he left the project, that deal -- and apparently the proper application he made at the time -- were no longer valid.

As for the promoters and the track, they issued a statement that reads in part: “We have worked with the local organizing committee in following the process to secure and host this international event,” circuit president Steve Sexton said.